Mirvac Sustains Residential Surge and Leasing Strength in 3Q26 with $630m Capital Raise
Mirvac Group reported robust operational results in 3Q26, driven by a 28% jump in residential sales, high occupancy across its investment portfolio, and a successful $630 million capital raise for its wholesale office fund. The company reaffirmed its FY26 guidance amid cautious risk management.
- Residential sales up 28% year-on-year with 1,896 lots sold FYTD
- Investment portfolio occupancy remains elevated at 97%, with positive leasing spreads
- Mirvac Wholesale Office Fund raises approximately $630 million in 12 months
- Major development projects like Aspect Industrial Estate and Blackwattle Bay progress on schedule
- FY26 operating EPS guidance reiterated with 6.7% to 8.3% growth expected
Residential Sales Momentum Drives Growth
Mirvac Group (ASX:MGR) continued its residential sales momentum in the third quarter of FY26, reporting 1,896 lot sales year-to-date, a 28% increase compared to the prior year. The quarter alone saw 592 sales, up 12% year-on-year, supported by strong pre-sales which climbed 13% to approximately $1.8 billion. Key project launches such as Kindira in Queensland and Darling in Western Australia achieved 100% sell-out at first release, while ongoing activity at Everdene in New South Wales sustained demand. Conditional sales on hand also rose to 344, highlighting the pipeline’s depth.
This sustained sales performance follows Mirvac’s earlier half-year surge, which featured a significant boost in residential sales and a $1 billion joint venture with Mitsubishi Estate, underscoring the company’s strategic pipeline restocking efforts and strong market positioning surge in residential sales.
Investment Portfolio Remains Resilient Amid Market Volatility
The company’s investment portfolio maintained high occupancy rates across sectors, with office assets at 94.4%, industrial at 98.7%, and retail nearing 99%. Leasing activity was robust, with over 90,000 square metres leased year-to-date, generating positive gross leasing spreads of 6.8%. New income streams from recently completed warehouses at Aspect North and South in Sydney contributed to the portfolio’s strength, with these assets approximately 98% leased at completion.
Mirvac’s build-to-rent (BTR) assets also performed well, with the LIV Anura Brisbane project reaching around 85% occupancy within nine months. The land lease segment reported 428 sales year-to-date, a 42% increase, and 333 settlements, up 14%, reflecting strong demand for alternative housing solutions.
Capital Raising and Funds Management Bolster Balance Sheet
Mirvac Wholesale Office Fund (MWOF) demonstrated continued capital raising success, securing approximately $200 million in the third quarter alone, bringing total capital raised to around $630 million equivalent over the past 12 months. Additionally, $175 million of secondary transactions have cleared year-to-date, indicating sustained investor appetite for high-quality office assets.
The company also entered a joint venture with Coombes Property Group to develop Hunter Street Metro East, expanding its commercial footprint. Mirvac is exploring new retail managed vehicle partnerships, signaling strategic diversification within its funds platform.
Development Pipeline Progresses on Schedule Despite Geopolitical Risks
Mirvac’s commercial and mixed-use development pipeline remains on track, with construction progressing well on major projects such as SEED Stage 1 at Badgerys Creek and the Aspect Industrial Estate. The latter is nearing full leasing with approximately 98% pre-leased, while practical completion milestones are anticipated in the near term.
The company is actively managing risks related to the Middle East conflict, including supply chain disruptions and inflationary pressures on civil works and materials costs. Mirvac has strengthened its balance sheet through a $300 million 10-year medium-term note issuance at a 133 basis point margin and secured $300 million in interest rate caps to mitigate financial volatility.
Guidance Reiterated with Cautious Optimism
Mirvac reaffirmed its FY26 guidance, targeting operating earnings per security of 12.8 to 13.0 cents, representing growth of 6.7% to 8.3%. Distribution is expected to increase by 5.6% to 9.5 cents per security. The company assumes residential settlements between 2,000 and 2,300 lots and non-core asset sales of approximately $500 million. Weighted average cost of debt is forecast at around 5.4%.
While some moderation in sales has been observed in recent weeks for select projects, particularly in New South Wales’ middle ring and Queensland, Mirvac’s overall market fundamentals remain solid with strong enquiry levels. The company continues to leverage its tier 1 supplier relationships and disciplined capital deployment to navigate uncertainties.
Bottom Line?
Mirvac’s sustained residential sales growth and leasing strength, coupled with successful capital raises, position it well for FY26 execution, though geopolitical and inflation risks warrant close monitoring.
Questions in the middle?
- How will ongoing geopolitical tensions impact Mirvac’s supply chain and construction costs in coming quarters?
- Can Mirvac maintain its residential sales momentum amid signs of recent moderation in some markets?
- What opportunities might arise from Mirvac’s exploration of new retail managed vehicle partnerships?
